After a firm is dissolved, a former partner wants to keep using the firm name. Which fact takes him outside the general restraint in section 53 of the Indian Partnership Act, 1932?
Question and options
After a firm is dissolved, a former partner wants to keep using the firm name. Which fact takes him outside the general restraint in section 53 of the Indian Partnership Act, 1932?
He has bought the goodwill of the firm
His surname forms part of the firm name
He contributed the largest share of capital
He was the firm's senior managing partner
Answer and explanation
Section 53 of the Indian Partnership Act, 1932 lets any partner restrain any other from carrying on a similar business in the firm name or using firm property for his own benefit until the affairs are wound up, unless they agree otherwise. Its proviso protects a partner who has bought the goodwill of the firm; having one's own name in the firm name, or a larger capital share, does not.
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